The Fall Creators Update includes a new OneDrive feature called “Files On-Demand”, in which your PC now shows “placeholder” copies of your OneDrive files. When you or a program accesses them, they’re downloaded as needed. That way, even if you have 1 TB of files in your OneDrive, they can take up almost no space on your PC, and you can still browse through them in File Explorer.
Source: How-To Geek
